USDA fines Missouri family $90k for selling a few rabbits without a license

It started out as a hobby, a way for the Dollarhite family in Nixa, Mo., to teach a teenage son responsibility. Like a lemonade stand.

But now, selling a few hundred rabbits over two years has provoked the heavy hand of the federal government to the tune of a $90,643 fine. The fine was levied more than a year after authorities contacted family members, prompting them to immediately halt their part-time business and liquidate their equipment.

The Dollarhite’s story, originally picked up by conservative blogger Bob McCarty, has turned into a call to arms for critics of the government’s reach and now has both Democratic and Republican lawmakers vowing to intervene.

John and Judy Dollarhite began selling rabbit meat by the pound in 2006, and as pets to neighbors and friends in 2008.

Raised on the three-acre lot on which their home sits, the rabbits were heralded by local experts for their quality and kept in pristine condition.

When a local pet store asked them to supply their pet rabbits, the Dollarhites had no idea they would be running afoul of an obscure federal regulation that prohibits selling more than $500 worth of rabbits to a pet store without a license from the U.S. Department of Agriculture (USDA). Under the law, pet stores are exempt from regulation.

But by selling to pet stores for resale, the humble Dollarhites became “wholesale breeders of pet animals,” said Dave Sacks, a spokesman for USDA who defended the fine, even while admitting it “looks curious” to the average person.

That’s especially so since the Dollarhites face no accusation they mistreated any animals. Instead, they committed what’s called in regulatory parlance a “paperwork violation” under the Animal Welfare Act, a 1966 law intended to prevent the abuse of animals.

In an interview, Judy Dollarhite, who said she “passionately” voted for Ross Perot in the 1990s, told of her interactions with government bureaucrats that sound like they came from a libertarian’s nightmare.

Blissly ignorant about the licensing requirement, a USDA inspector arrived unannounced in November 2009 at the Dollarhites’ home. The inspector had viewed invoices at a pet store that was purchasing the rabbits, helping her track down the family’s home.

“This cage is a quarter-inch too small, you’d have to have this replaced,” the inspector told Judy Dollarhite, she recalled.

In fact, there are no actual written USDA standards for what constitutes proper care of a rabbit by a wholesale breeder of pet animals, Sacks said. Instead, the process is a “negotiation” between a USDA official and a breeder when they apply for a license.

The inspector left the Dollarhites’ home, telling Judy Dollarhite she needed a license and saying she would send an application, Judy Dollarhite said. But the instructions were unclear and the application never came, Judy Dollarhite said.

Two months later, in January 2010, another USDA official called, asking for a meeting with the Dollarhite family at their full-time business, a small computer store.

The inspector watched the store for an hour from his car before the meeting, and his physical appearance put off the small business owners.

“He was covered head to toe in filth. Jeans is one thing, but these were slicked. He had ‘Grizzly Adams’-style hair,” Judy Dollarhite said.

The inspector, whose name Judy Dollarhite could not recall, intimidated the couple, claiming to have interviewed their neighbors about their political beliefs.

Scared they would face a small fine for a part-time business that had only resulted in about $4,000-$5,000 in sales and $200-$400 of profit, the Dollarhites agreed during the meeting to immediately suspend their business, which the inspector said would help their case.

Over the next weeks, Judy Dollarhite traded all of her rabbit breeding equipment on Craigslist — rather than selling it so she could not be engaged in “commerce.”

Eight weeks after their meeting, the Dollarhites called a USDA office in Maryland. A man there said, “We’re going to make an example of you,” Judy Dollarhite said.

USDA spokesman Sacks said he didn’t know about the interactions between the USDA and the Dollarhites. Roxanne Folk, the USDA point of contact the case against the Dollarhites, declined to comment when reached by phone.

It wasn’t until April 19, though, that the Dollarhites received official word from USDA.

A letter from Sarah Conant, the chief of the Animal Health and Welfare Enforcement branch of USDA’s enforcement division, said, “Our investigation shows that you have violated the United States Code of Federal Regulations … You may … settle this matter by paying $90,643.”

A draft settlement agreement attached to the letter specified that the Dollarhites had, according to USDA’s investigation, sold 619 rabbits in 56 transactions over almost two years.

The Dollarhites told USDA they aren’t accepting the “offer.”

“My client rejects that proposal,” wrote their attorney, Richard Anderson, in a May 19 letter, noting that according to USDA’s own literature, its 6,000 annual enforcement cases average “a penalty of $333.33 per case, and yet you contend it would be appropriate my client tender a penalty of $90,643.00.”

One Washington lobbyist for the industrial farming sector said the penalty was ludicrous. The rabbit sales “are on the scale of a high school 4-H project,” the source said.

USDA spokesman Sacks said the $90,643 fine “looks curious to say the least.” But he insisted it was necessary for USDA to punish violators to ensure businesses across the country register, putting them on the USDA’s radar screen for inspections and possible enforcement.

“This is the only way we can ensure these animals are getting the care they need,” Sacks said.

Meanwhile, Missouri lawmakers Democratic Sen. Claire McCaskill and Republican Rep. Billy Long have contacted the Dollarhites, saying they’ll help intervene with USDA. And a Tea Party group is planning a protest at a USDA office in Ozark, Mo., office on Wednesday.